Official confident feds will pay 90% of Sandy costs

Apr. 25, 2013

MONROE — Potential good news for local governments and taxpayers: The head of post-Sandy recovery efforts in Gov. Chris Christie’s office says he’s “fairly confident” that the federal government will wind up picking up 90 percent of costs from the superstorm’s aftermath.

Marc Ferzan, executive director of the Governor’s Office of Recovery and Rebuilding, said that disaster-related costs eligible for reimbursement in New Jersey have reached $808 million to date. If those costs get near $1.15 billion, he said, the reimbursement rate can increase.

On $1.15 billion in costs, the difference between the two reimbursement rates would amount to $172.5 million in extra costs picked up by Washington.

Ferzan, speaking at a New Jersey Chamber of Commerce breakfast roundtable Wednesday at the Forsgate Country Club, said the state has “an aggressive plan to get that number” and works daily with the Federal Emergency Management Agency in an effort to reach that trigger. FEMA, he said, has been cooperative.

“What we hope to do is by this summer hit that threshold of $1.15 billion. That’s the plan. I’m fairly confident we’ll get there,” Ferzan said.

“The ultimate decision, though, does not belong to the state. If it did, we’d be there right now,” Ferzan said. “It belongs to the federal government. So with that caveat, based on what I’m being told ... I think the July, August timetable is realistic.”

Typically, FEMA reimburses state and local governments for 75 percent of the costs they incur responding to declared disasters and repairing damaged infrastructure.

Reimbursement

Many municipal and county governments borrowed money in Sandy’s immediate aftermath to cover cleanup costs. That debt will have to be repaid; whatever portion isn’t covered by FEMA would be picked up by local taxpayers, though the state is proposing to use $50 million from its first installment of federal Community Development Block Grant to help local governments afford the local match required to receive federal funds.

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In December, Christie — as New York Gov. Andrew Cuomo had earlier — asked FEMA to pick up 100 percent of the costs from Sandy. Such waivers are rare, but not unprecedented: The federal government picked up all the costs that way in Gulf Coast states after Hurricane Katrina, at the World Trade Center after the 2001 terrorist attacks and for some search efforts in Louisiana and Texas after the Space Shuttle Columbia disaster in 2003. .

According to a 2010 report by the Congressional Research Service, cost-sharing agreements were negotiated until 1980, when the 25 percent state/local share became the standard. A per capita formula was established at that time, which now increases each year to adjust for inflation.

For 2012, disaster-related costs had to reach $131 per person to trigger the 90 percent reimbursement rate. For 2013, it’s $133 per person.